Rupiah Weakens despite Greenback Correction

TEMPO.CO, Jakarta - The rupiah lost 16 basis points (0.13 percent) to close yesterday's currency trade at 12,150 per US dollar despite the greenback's depreciation against the majority of regional currencies.

The US' manufacturing performance index for September fell to 56.6, causing most investors to fret about the prospects of America's economy. Unfortunately, the dollar correction failed to power up the rupiah, as investors are still worried about the domestic politics.

"The decline in the US manufacturing data caused the US dollar to edge down," Rangga Cipta, an economist from Samuel Sekuritas Indonesia, said yesterday.

As a result, Rangga said, investors opted to wait for a confirmed data on the US' monthly non-farm payrolls. On the other hand, investors are also still waiting for the European Central Bank's (ECB) decision on its version of a large-scale bond purchase program, similar to the Fed's quantitative easing (QE).

Today, with domestic political sentiment that continues to warm up, the rupiah is expected to remain under pressure, moving between 12,100 and 12,250 per US dollar. The US' non-farm payrolls release is predicted to be the dominant catalyst for the rupiah's movement.